Totally wrong, Becks. Although we don't know what global warming or the hadron collider will do to humanity, if you're 30 or so years from retirement and currently contributing to a 401K, it's extremely likely your pension will exceed your father's. The current stock market crash is a windfall to you, since you can now buy stocks at the current depressed levels, and maybe at next year's or next decade's even more depressed levels. Think of how many shares you'll own when the boom of 2035 starts!
It's even more fun being a complete failure at age 29!
Prediction is difficult, especially when it concerns the future. If things go badly over the next 25-50 years, those defined benefit pension promises may not be kept; if they go well, the world may be so much richer that the 401(k) generation will live well in retirement.
Oh! AND he gets retirement health care benefits. I know these can change but, for now, his outlook sounds much better than mine.
On the other hand, the place my dad worked at closed down about two years short of when he was planning to retire, leaving him with something like 3/4 of the pension he had always expected to get. Just about any retirement plan leaves the possibility that you will get screwed by random chance.
if you're 30 or so years from retirement and currently contributing to a 401K, it's extremely likely your pension will exceed your father's.
30 years of 5% of salary retirement contributions leaves you with anywhere between 5 and 10 years worth of a 2/3 salary defined benefit pension (assuming a 5% and 8% annual rate of return for the lower and upper bounds, respectively). Unless you're planning on dying pretty young, doesn't seem like that great of a deal.
I know these can change but, for now, his outlook sounds much better than mine.
What goes up, must come down. One day cock of the walk, next a featherduster. Things change: just ask Alan Greenspan.
max
['Besides, you might get hit by a bus.']
I know these can change but, for now, his outlook sounds much better than mine.
Yes. Now, why exactly were you opposing Bush and his gang?
I know you know this, but this is a reason why you want a (properly funded, well regulated) defined benefit pension, rather than a reason to be angry that your father has one.
Ditto to 9. It is an enormous weight off my mind that my mother, who is not great at financial planning but is employed by the government, has a similarly solid pension coming to her.
"Properly regulated," IMO, probably includes getting employers out of the business of running their own pension investments, actuarial work, etc.
It is not enough to succeed. Your father must fail.
12: No use, I'm afraid. Feeling like I should have dropped out after the M.A. at this point.
I don't want my father to fail or his pension taken away. But i I am upset that this is something that will never be available to future generations and the really crappy alternatives we have that won't let us have as good of a future as our parents, or require much bigger sacrifices during our working years to equal them.
14: At some point during my long stint as contingent faculty, I started thinking of every moment I spent doing scholarly work as an end in itself. It doesn't matter if this temp job never leads to permanent work. It is good to be teaching here and now. It doesn't matter if this article never gets accepted (or finished) it is good to be writing here and now.
This mindset is harder to achieve when the here and now is some task like grading.
15: I didn't really think you wished ill on your father. I just decided to take the risk of an inappropriate joke.
But i I am upset that this is something that will never be available to future generations and the really crappy alternatives we have that won't let us have as good of a future as our parents, or require much bigger sacrifices during our working years to equal them.
But to a real extent, defined benefit pensions and retiree medical care are something that even bloated plutocrats can't reliably offer in large numbers at this point. (I have the shakes about what will happen if the PBGC has to shoulder the auto industry's pension plans.) This is a reason to want the government to offer Social Security and Medicare and make these programs more generous, and why a responsible society would have the Congressman and think tank jerkoffs who wanted to cripple Social Security horsewhipped and paraded through the streets in shame.
16 + 17 = 2009's high-larious comedy about La Rochefoucauld, Zombie Adjunct.
I don't want my father to fail or his pension taken away. But i I am upset that this is something that will never be available to future generations and the really crappy alternatives we have that won't let us have as good of a future as our parents, or require much bigger sacrifices during our working years to equal them.
So basically our parents were economically better off than us, and the USA from 2000-2040 won't be as rich as the USA from 1975-2015?
I'm prepared to endorse the life philosophy that it's not enough that I succeed, Becks' father must fail.
Oh, Cala, I so feel for you. Are you in the dark depths of your dissertation, on top of everything else? I can't tell you how much better I feel about everything (including being contingent faculty) post-dissertation.
20: The U.S. could be richer and still make it the case that the average person isn't able to afford the things their parents could.
22: Dark depths of the job market. The diss is mostly fine.
something that will never be available to future generations
But to a real extent, defined benefit pensions and retiree medical care are something that even bloated plutocrats can't reliably offer in large numbers at this point.
See, this is bullshit. The US now is not poorer than it was when defined benefit pensions were more common. And the auto industry isn't crippled by its pension obligations because they're somehow logically of economically impossible to meet -- they're having trouble because they took the money that should have been invested for pensions, and gave it to their shareholders. Defined benefit pensions haven't become unworkable, employers just cut compensation by ceasing to offer them.
There's a portability problem with pensions -- that I'll admit. It was easier to administer them when an employee was likelier to spend a career at one firm. But even that's reasonably easily soluble -- set up big "Pensions R Us" funds, and have different employers buy service credits for you at one.
there's no way my generation can ever hope to get that from our 401(k)s
Yeah, well, but it's Better! To let you Privately Invest that Money! And use your Own Judgment! And Free You from the Tyranny of having to work for one employer your whole life!
The whole Big 3 fiasco has made me doubt that non-governmental defined-benefit plans can be made to work, though maybe the right regulations could fix it. I don't know much about how they are currently regulated. The only truly way to safely implement one is to make companies pony up the money up front, which would be hard for companies to make work. The alternative is that companies fund their obligations out of current revenue, which seems like a high-risk deal for workers.
And the "auto industry crippled by pensions" meme has to freaking stop.
They're crippled because sales are down what, 40%? Come ON. No business can survive that without a major cash infusion, and any business as huge as the American auto industry isn't going to be able to get a major cash infusion like that from the banks right now, so.
Saving for retirement, you say? Hmm. Perhaps I should consider one of these 'job' things I so often hear about.
I hate the APA.
Meanwhile, LB is right that this is a political question of distributive conflict over the social product rather than some inescapable economic law of nature. Libertarianism is the ideology that takes a contingent fact about the social organization of the market and makes it a necessity, and then a virtue.
26: I am so not a finance person, but my understanding is that current regulations in theory require companies to fund obligations as they accrue (that is, that the fund should always have enough in it to cover the actuarial expected payout at the expected rate of return). Pensions get into trouble when regulations allow the company to fuck with the financial assumptions:
The stock market is booming, so under the perfectly safe assumption that it will continue to boom forever, and this crazy rate of return is the new normal, we now have much more money than we need, so we can take it all out and give it to our stockholders. Huh, the market crashed. Now we don't have nearly enough money. Not our fault, no one could have known.
If my memory of the relevant law is roughly accurate, we don't need big changes, just tighter controls.
Meanwhile, LB is right that this is a political question of distributive conflict over the social product rather than some inescapable economic law of nature.
I said that? Boy I'm smart.
I said that? Boy I'm smart.
You should go to law school.
Wikipedia on ERISA's requirement that defined benefit plans be fully funded. It's roughly as I described it.
I hate the APA.
Surely you don't have to go. Isn't it your role to stay home and take care of the kid/kids?
27: Toyota also saw sales fall 40%.
30: I thought that's how it worked, but then I've become confused on that, possibly by right-wing propaganda. I just looked at GM's latest SEC filing, and they report $3 billion in assets as "pre-paid pensions", and $11.5 billion pension liabilities. The figures for this time last year are pretty similar, so it's not just that value of their assets have plunged.
22: Dark depths of the job market. The diss is mostly fine.
Sorry, I was unclear. Even when the diss is going just fine, diss plus job search is unpleasant, because you aren't engaged in something fresh and new at the same time that you're job hunting. You're tied to your grad student identity and your academic work is largely dedicated to wrapping up something you committed to a long time ago, where the primary audience is your committee, instead of putting out lots of new feelers on new projects and new audiences. So the primary new thing on your agenda, the main thing that is really about looking into the future, is the job search, which is mainly not in your own control and generally a good recipe for feeling like shit.
33: Yes, but I believe that they can take any excess whenever they want. When Chevron took over Gulf (aka the stupidest fucking company on the planet) in the mid '80s one of the bennies was an overfunded pension fund.
The U.S. Supreme Court let stand a decision confirming that an employer can merge an underfunded pension plan it maintains into an overfunded plan that it maintains or acquires. * Faced with the prospect of a hostile takeover by T. Boone Pickens, Gulf Oil agreed to a friendly merger with Chevron Oil Corp. in 1984. Prior to that merger, approximately $ 550 million in excess assets had accumulated in the Gulf Oil pension plan. After the merger, the Gulf Oil plan was merged into the Chevron pension plan, creating a single overfunded pension plan. Some 40,000 former employees of Gulf Oil brought suit alleging that the excess assets rightfully belonged to them and should have been used to increase benefits. The Fifth Circuit (covering Texas, Louisiana, and Mississippi) held that nothing in the Gulf Oil pension plan language or ERISA would prevent Chevron or the Chevron plan from receiving the surplus assets when the two companies' pension plans merged.
The Chevron pension plan contained explicit language permitting a reversion of excess assets to Chevron as the employer/plan sponsor. The Gulf Oil plan did not. However, the Fifth Circuit held the plan contained an implied right to a reversion to the employer, based on language prohibiting any reversion until all liabilities under the plan were satisfied in full.
A lesson almost universally learned, I'm sure.
And the auto industry isn't crippled by its pension obligations because they're somehow logically of economically impossible to meet...
And the "auto industry crippled by pensions" meme has to freaking stop.
Jesus, did I say that? No. I'm worried that the PBGC is going to be saddled with the huge liabilities of GM and Chrysler's decades of mismanagement, and is going to crack with disastrous implications to either retirees or America's ability to spend its way out of this recession.
The ERISA thing is something of a canard, too, if my understanding is correct, given that companies have been permitted to assume that the assets to offset their liabilities will grow the historic rate of 7% (and even higher in many cases). Certainly GAAP earnings have been able to assume that. The S&P 500 has produced negative growth in over the last 10 years. Find me a pension plan from a major employer that assumed negative growth in the equities markets for a decade plus and funded itself accordingly.
Companies loot pension plans (already under Reagan, with Reagan's consent). Unions loot pension plans (though when they do, we hear about it as an argument against unions). Wall Street loots pension plans (my sister lost something like 25% just now). And you lose money if you hide gold under your bed, even if a burglar doesn't get it and even if you don't buy it at an inflated price.
People who talk about how awful a trustee Gummint Bloodsuckers are really have to suggest something better.
Yes, but I believe that they can take any excess whenever they want. When Chevron took over Gulf (aka the stupidest fucking company on the planet) in the mid '80s one of the bennies was an overfunded pension fund.
The U.S. Supreme Court let stand a decision confirming that an employer can merge an underfunded pension plan it maintains into an overfunded plan that it maintains or acquires. * Faced with the prospect of a hostile takeover by T. Boone Pickens, Gulf Oil agreed to a friendly merger with Chevron Oil Corp. in 1984. Prior to that merger, approximately $ 550 million in excess assets had accumulated in the Gulf Oil pension plan. After the merger, the Gulf Oil plan was merged into the Chevron pension plan, creating a single overfunded pension plan. Some 40,000 former employees of Gulf Oil brought suit alleging that the excess assets rightfully belonged to them and should have been used to increase benefits. The Fifth Circuit (covering Texas, Louisiana, and Mississippi) held that nothing in the Gulf Oil pension plan language or ERISA would prevent Chevron or the Chevron plan from receiving the surplus assets when the two companies' pension plans merged.
The Chevron pension plan contained explicit language permitting a reversion of excess assets to Chevron as the employer/plan sponsor. The Gulf Oil plan did not. However, the Fifth Circuit held the plan contained an implied right to a reversion to the employer, based on language prohibiting any reversion until all liabilities under the plan were satisfied in full.
A lesson almost universally learned since then, I'm sure.
14: At some point during my long stint as contingent faculty, I started thinking of every moment I spent doing scholarly work as an end in itself. It doesn't matter if this temp job never leads to permanent work. It is good to be teaching here and now. It doesn't matter if this article never gets accepted (or finished) it is good to be writing here and now.
This mindset is harder to achieve when
You realize it's self-deception?
I can already imagine how much happier I will be when I finish my dissertation. That makes me sadder now, which in turn increases the happiness differential compared to the post-dissertation state, setting up a vicious suicidal cycle.
38 continued: ...although, honestly, at this point another $25 or $30 billion on the fire won't matter.
Writing feels like heaven these days. It's glorious.
37,40: Oops.
After the Black Friday crash (how innocent that seems now) in 1987, I read an article that mentioned that the pension plan at the company I worked at was one of the pioneers in program trading that got a lot of scrutiny after the event.
You go gang! I'm sure aggressive program trades were critical to maintaining the relatively conservative growth projections the fund needed.
Utter fucking criminals, almost every fucking one of them. And the ones who run manufacturing and service companies are simply the ones who aren't ruthless enough to make it in banking and finance.
17: I didn't really think you wished ill on your father. I just decided to take the risk of an inappropriate joke
And a very good one it was! If there is a God, I fancy that when he heard the original he thought, "Gore Vidal, for the win!"
What's mostly sucking about the job market is the realization that I won't get a job. Other than that, so to speak, the play was fine.
Huh. In my experience, this is a generation war that happened between my parents and my grandparents, not between me and my parents.
Gneral Shinseki has an MA in English from Duke. So there is something you can do with an English degree.
Surely you don't have to go. Isn't it your role to stay home and take care of the kid/kids?
I've had to go along in the past, usually with heelARious results, that's no longer the case. But while I'm well used to taking care of the kids by myself, being obliged by the Eastern APA to do it a few days after Christmas really gets on my wick.
Huh. I don't suppose there's family to go visit over the APA or anything?
Huh. I don't suppose there's family to go visit over the APA or anything?
Nah. They're coming to see us first, as it happens.
I mean, it's not really a big deal -- it's just a sacred part of my culture to want take the entire period from the 23rd to the 2nd and spend it hanging around eating, drinking, opening presents, watching movies, etc. This never happens -- and although it's not just because of the APA, they're certainly the most convenient target for the annual Christmas Rant.
Well, as the kids get older, that will turn into something that can be done as a (temporarily) single parent -- that sort of frivolous sloth is something my two are totally up for, and they're only 7 and 9. But that doesn't help you any this year, of course.
I'm not visiting family at all this year due to the APA, which is just as well, since I already had one holiday with everyone asking me about my career.
a complete failure at age 29
IMO feeling this way means you still have hope for yourself, and the hope is important to keep alive. Bad times get better, try not to let a shitty job market get you down.
55: Oy. I can't say anything informedly helpful or sympathetic about the academic job market. But however it turns out, a year or two from now (I'm not clear on the time frame) something will have happened such that you're no longer dealing with the same problem. Different problems, but not the same one.
it's just a sacred part of my culture to want take the entire period from the 23rd to the 2nd and spend it
I really thought that this sentence would end "drunk".
55: Do you find that attempts to comfort you only increase your despair?
I really thought that this sentence would end "drunk".
There's that, too. But I am no longer young.
Cala,
You're too clever not to get a job, and if you don't get one this year (for reasons not under your control) you'll get one next year. Be of good cheer.
While we're talking about academics and jobs-
I'm hiring for two positions. We had an applicant who was somewhat unusual- claimed to have done pretty impressive things with what seemed like meager qualifications, but because he was talking about things at a high level it was hard to pin him down on specifics. Aside from checking references, it is ever practice to actually check with schools if someone has a degree they claim? Will schools release that information (not a transcript, just "Does person X hold a degree from your school?")
Bitching about the APA season now begins Dec 6?
This is like seeing Christmas decorations up before Thanksgiving.
62: Simply requesting a transcript from the institution should be routine and enough to determine whether they actually graduated.
62: I heard somewhere, probably from someone who had a friend who worked in a school's records office, that schools get that kind of question routinely. (And not infrequently the answer is "no.") So I assume that some places do check up on this, short of requesting full transcripts.
Do you find that attempts to comfort you only increase your despair?
More cheery motherly optimism, because it means it's going to be that much harder explaining that I'm living in a box without health insurance when she thinks it's just obvious that I'm "up for professorships."
58 is great, and was my expectation, too.
Will schools release that information (not a transcript, just "Does person X hold a degree from your school?")
Here they will, on the assumption the person doesn't have a privacy hold placed.
Will schools release that information (not a transcript, just "Does person X hold a degree from your school?")
Schools will often verify whether someone was enrolled, yes -- though I don't know if they'll do it for third parties. Probably they would.
Although looking at Princeton's form for this, they explicitly say "We will not accept third-party requests". The third party has to ask the student to submit the form.
The third party has to ask the student to submit the form.
But isn't this a simple thing you can do in asking for applicant's dossiers?
When I have applied for jobs, I've requested by transcripts be forwarded as a matter of course, and when I've screened applicants, I've expected to see them as a matter of course.
When I have applied for jobs, I've requested by transcripts be forwarded as a matter of course, and when I've screened applicants, I've expected to see them as a matter of course.
When I worked for Military-Industrial Complex Component X, I had to authorize them to receive this information as my billing rate was partially dependent on my degree status. Eventually this apparently nearly led to me getting fired due to sitcom-level confusion about my double degree. My boss told me about the zany hijinx months after the fact.
My transcripts list degrees awarded--is this not the usual thing?
SP should hire me instead. Wait, that's a terrible idea.
Cala, remember, you can always take up people huntin'.
Bitching about the APA season now begins Dec 6?
Been a while since you were on the market, has it?
Sorry Sifu, you'll need a BS, not just a BA.
We don't routinely get transcripts when hiring because most people have industry experience, so the education listed is just accepted as a given. We don't want to just dump him because if he's for real it's pretty impressive. I'll call the schools next week.
Would a Google search of his name reveal connections to the school in question? Sometimes, schools publish graduation lists on the web.
she thinks it's just obvious that I'm "up for professorships."
My immediate family now understands the basic outlines of how things work, but I'm blessed that nearly everyone in my extended family and social circle lacks any clear idea of what follows from a PhD -- most will only get as far as, "So I guess you'd teach or something?" Of those, all will be unclear as to whether I'd be teaching college or, I guess, high school.
I thought the next step was that you sold Amway, and the centerpiece of your pitch was how you came to realize that "Ph.D." stood for "piled high and deeper."
When I have applied for jobs, I've requested by transcripts be forwarded as a matter of course, and when I've screened applicants, I've expected to see them as a matter of course.
Of the 30 or so places I sent applications a bit over a month ago, only one asked for a transcript. If I weren't in the position I am where I say I am, wouldn't my recommendation letters show that?
If I weren't in the position I am where I say I am, wouldn't my recommendation letters show that?
That depends on the scrupulousness of your writers, oder?
I guess so. But if you're in a position to get a job, your letter writers are probably going to be known, right?
62: It's certainly worth checking. I remember a guy who impersonated one of the docs from the med school I was working at. He pulled it off for quite a while before someone got suspicious. His trick also involved stealing stationary during job interviews and writing glowing references on it for use down the line.
See also:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/02/18/MN132076.DTL
Impersonation plus pensions:
The head of prominent New York law firm Dreier LLP was arrested Tuesday in Toronto for allegedly impersonating another individual.
The alleged offense took place during a business meeting between the Ontario Teachers' Pension Plan and Fortress Investment Group LLC.
Constable Tony Vella with the Toronto Police Department said Marc Dreier, 58 years old, was arrested for "personation with intent," which involves "fraudulently impersonating any person, living or dead, with intent to obtain any property or interest in any property." The offense, he said, carries a maximum 10-year prison term.
My sympathies to Cala and everyone else doing the job market thing this year. I'm very happy to have gotten a good job last year and not had to do this thing for a third time with the economy collapsing around me.
Don't know what your funding situation is, Cala, but if things are better next year and you can try again, there might be some hope of hiring committees saying "Okay look, we're going to get plenty of qualified applicants who didn't get jobs last year because idiot bankers blew up the economy, so let's not be dissing people for being on their second try."
84: Alas, I'm out of time. And I don't share your confidence; the market is never great, and there's always lots of reasons that qualified candidates don't get jobs, and they still look at people on their second try and figure they're getting goods past the sell-by date.
Well, being on your second try isn't the kiss of death by any means. At the universities where I got on-campus interviews, the majority of young people working there whom I asked didn't get jobs on their first try.
A friend of mine got into medical school on her third or fourth try. Different than applying for a job, of course.
One thing you could do is either work up some more things for publication, or study to give yourself an additional strength or to repair a perceived weak spot.
I got a tenure track job on my sixth try (and four years after I filed). Which isn't, I realize, encouraging.
But, more helpfully, when I was on a search committee, the only occasions time since graduation was mentioned was when the graduation was 7-10 years past.
Well, being on your second try isn't the kiss of death by any means.
Eight years. I was on the market for eight years. Not counting a few dry runs before my first temp job.
There, don't you feel better, Cala? Have fun storming the castle.
Cala, I sympathize. We're in the same boat this year. Is it just me, or with the economic situation do those posted positions with a "postion dependent on funding approval" sound more iffy than usual?
everyone in my extended family and social circle lacks any clear idea of what follows from a Ph.D
Likewise. Some people I know wonder (to me, I mean) when I'll stop messing around with academics and get a `real' job (i.e. industry, but in a vague what-the-heck-do-phd's-do sort of way). I suppose right about now they'll change to worrying I may be stuck in academics the bad economy.
Is it just me, or with the economic situation do those posted positions with a "postion dependent on funding approval" sound more iffy than usual?
They sure do sound that way, and they are, too. I know my current dean has made a number of remarks that make it quite clear that the college will be making some number of hires fewer than the number of approved searches, along the lines of "we will be holding proposed hires to a somewhat higher bar than usual" and the like. Ugh! I am trying not to think too much about that, except from the point of view of exculpating myself if nothing pans out.
If my memory of the relevant law is roughly accurate, we don't need big changes, just tighter controls.
I agree with this abslutely, but I still think that losing 40% of sales basically overnight is going to result in a crisis regardless.
(Not sure the Toyota comparison is at all fair--surely Toyota and other auto makers that aren't American have completely different relationships with their governments and financial whoosiwhatsis.)
If my memory of the relevant law is roughly accurate, we don't need big changes, just tighter controls.
I think this underestimates how hard it is to determine the right amount of funding for an obligation that's subject to 50+ years' worth of market and longevity risks. The current system gives employers too much room to play games, and that should change, but just as employees need a predictable retirement income, employers need a predictable annual funding cost, and much of the room for gaming the current system is at least nominally there to address that employer need. LB's "Pensions R Us" model might be better (we have such institutions already; they're called "life insurance companies"), but even then they'll be vulnerable to underpricing when markets are strong and then having to boost prices exactly when employers can worst afford it. So I'm not sure any entity smaller or less permanent than a government can really do the job.
I'm also not sure that it's entirely a bad thing to let employees bear a portion of the risk, through defined contribution plans, to encourage people to work a little longer if things aren't going as well as anticipated. That won't work for everyone, but it's not crazy for us indoor, no heavy lifting sorts to be deciding to retire a little earlier or a little later depending on how our assets look.
I agree with this abslutely, but I still think that losing 40% of sales basically overnight is going to result in a crisis regardless.
It's not like sales dropped 40% overnight with absolutely no warning. Demand for cars had been falling for a couple of years, but a combination of the inability (due to huge capital assets and crap like the jobs bank) and unwillingness (don't want the stock price to go down!) to reduce costs led the automakers to try to pull as many sales forward as possible. That was inevitably going to make the final drop steeper.
I think this underestimates how hard it is to determine the right amount of funding for an obligation that's subject to 50+ years' worth of market and longevity risks.
Funny how everyone seems perfectly happy with underestimating this though. Lots of things are hard to estimate, and there are good techniques for making sure you probably overestimate a bit. It's still predictable, which is more important than being cheaper, really, here.
97
Accounted for honestly, defined benefit pensions are unaffordable (in that the typical employee would rather have the money in salary).
That depends on what you mean by "accounted for", "honestly", and "typical".
97: But you may have to underestimate by quite a bit to be safe, and if you're going to do that there isn't any particular advantage over a (far more generous than usual) DC plan plus employee-purchased annuities at retirement. It's a variant of the same set of issues created by employer-provided health insurance. Employment has to generate the money, but do employers really have any logical role other than that?
And Shearer's not all wrong: employees, given a choice, do tend to favor current salary over realistic pension funding. That's partly just another example of how the middle class's share of the economy has gotten squeezed, but saving enough for retirement is an expensive proposition however you do it.
Which does not, of course, mean that you don't have to do it. But enhanced Social Security plus larger, better-regulated DC may be more important than reviving DB.
I don't want my father to fail or his pension taken away. But i I am upset that this is something that will never be available to future generations
If you don't fight for it. Get thyself to an union. Or better, seriously attempt to get socialism going again in the US: that's what scared the powers that be enough to buy of the working classes last time.
95: I'm not sure that I'd call it gaming. I know that you've done ERISA work, and I've only studied the damn thing, but the bit about the law which really bothered me is the way that the IRS rules diverge from actuarial principles. Actuaries know that if teh stock market goes up suddenly it probably won't cover all your liabilities in the future, but the IRS won't let you out more money into an overfunded pension fund--until it's underfunded, at which point, your business might not be doing so well.
In addition to your 401K you need some annuities. Part of the reason for the shift from defined benefit to defined contribution was the fact that retirees started living longer. A lot longer. It is not inconceivable to be retired longer than you work. Doesn't add up. And young brown people may resist paying old white people for sitting around.
103: I think that was addressed legislatively within the last 3-5 years.
95
I'm also not sure that it's entirely a bad thing to let employees bear a portion of the risk, through defined contribution plans, to encourage people to work a little longer if things aren't going as well as anticipated.
Mmm. For several years now, both my parents have been talking about retiring soon, before age 65. It's always made me a little nervous, and the economy is only making it look like a worse decision. They enjoy their jobs as much as anyone and there's no specific reason for retirement other than the reasons everybody retires - want more free time, want to get to a place with better weather, etc. - but the math shows that they can afford it, apparently, so they're planning to do it. But what if they live for 30 more years instead of just 20? What if the value of 401(k)s goes down even further than they already have?
Maybe it should be easy to tell my dad "I think you should keep working for a few more years so taking care of you in your old age isn't as much work for me as taking care of your own parents was for you," but it's not.
106: Well, yeah, people don't always evaluate their long-term self-interest as well as they might. That's why it's important to have a solid, defined-benefit floor for everyone, prudent or otherwise, i.e. Social Security plus either employer-funded DB or more Social Security. All I'm suggesting is that at the margins, it's not bad to have people thinking about whether to retire now with a little less lifestyle and a little more risk or two years from now with a little better lifestyle and a little better security.